Question

ABC Company employs a periodic inventory system and sells its inventory to customers for $27 per unit. ABC Company had the following inventory information available for the month of May: May 1 May 8 May 13 May 18 May 21 May 28 May 30 Beginning inventory 2,400 units @ $14 cost per unit Sold 1,000 units Purchased 1,300 units @ $17 cost per unit Sold 1,200 units Purchased 1,100 units @ $11 cost per unit Sold 300 units Purchased 700 units @ $10 cost per unit During May, ABC Company reported operating expenses of $14,500 and had an income tax rate of 43%. Calculate the amount of net income shown on ABC Company's income statement for May using the LIFO method.

Answer 1

Periodic : LIFO Goods Purchasd Cost of Goods Sold Inventory Balance cost of Goods Cost Per Available for # of Units Cost Per Cost of Cost Per Ending # of Units Unit sales Goods Sold # of Units Unit Inventory May-01 2400 14.00 336001 0 14.00 2400 14.00 33600 May-13 1300 17.00 22100 7001 17.00 11900 600 17.00 10200 May-21 11000 11.00 12100 1100 11.00 12100 0 11.00 0 700 10.00 7000 700 10.00 7000 0110.00 Totals 5500 74800 2500 31000 3000 43800 Sales Revneue (2500*27) Less: cost of Good Sold Gross Profit Less Operating Expenses Profit Before Tax Less :Tax 43% Net income 67500 31000 36500 14500 22000 15695 6305 Answer: $6305